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tv   Book TV  CSPAN  February 12, 2011 8:00am-9:00am EST

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decision. this case is submitted. >> welcome to c-span2's booktv. every weekend we bring you 48 hours of books on history, biography and public affairs by nonfiction authors. .. >> coming up, former british prime minister gordon brown presents his thoughts about the causes of the 2008 global economic downturn and suggests ways to turn things around.
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he speaks at new york university in new york city for about an hour. [applause] >> can i say i am here for one very, very important reason? because your brilliant president, john saxton, has inspired me as he inspires you and as he inspires, increasingly, many continents around the world with a vision of a global network university. this is a vision that is born out of john's great and deep thinking. it's a vision that is forged out of a view of the interdependence of civilizations around the world. it is a view that is being driven forward by brilliant people in this university, and it's being realized in a campus already in abu dhabi, plans for other campuses, plans for sites
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on all the different continents of the world with this great ideal that by people meeting with each other, discussing with each other, debating with each other ideas and challenging each other about their ideas and prejudices that we can build a stronger global society in the future. so i am very privileged to have been invited, first of all, by my great friend, bob, and then by john saxton to be a small part in a great project which is one of the path-breaking initiatives that is going to change our world for good over the next few years. and i believe you who are students and friends of the university are part of a project that will not just change your country, but change the whole world. i started off as a he canturer in a university -- as a lecturer in a university or when i was somewhat younger. and universities, as you know, stand for objectivity, rationality, impartiality, for
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the disinterested pursuit of truth, and these are all the qualities you have to leave behind when you go into politics, as i found out. [laughter] i've had a bit of time on my hands over these last few months, inl voluntarily, and i looked at what my predecessors had, had done and had achieved. when disraeli left office, he started writing poetry, and the fact that nobody was interested in reading it or even hearing it didn't seem to worry him at all. when gladstone left office, he ran -- and it was commented on at the time, but just imagine what the papers would have made of it now, the media, he ran what he called a midnight club for fallen women. and he used to go out into the streets of london to try to rescue prostitutes, and it raised into question what his real motives were. [laughter] and then we had a great prime
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minister in lloyd george who's probably the only prime minister of britain that has ever made the pages of playboy because of his behavior. churchill resigned in 1955, and he changed the resolution he made, winston churchill, never to drink before lunchtime. and when he retired he changed it, that he would never drink alcohol before breakfast. [laughter] we had a prime minister called rosebury who whenever a horse race clashed with a cabinet event, he always chose to go to the race meeting. when he retired, he said the greatest thing that had happened in his life was his horse winning the grand national. so i decided i would do something far more productive, i would work with new york university. [laughter] so i'm very privileged to be here today. [applause] when i was chairman of the
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international monetary fund and we had meetingsing in washington -- and this is what i want to speak about very briefly before we have you free to ask any questions you want and to continue that discussion -- we had a meeting a few years ago. and there were demonstrators outside the meeting. and they were complaining about globalization and all the effects of it. and i looked around the posters that were being displayed at that rally, and there were all sorts of different groups represented. but it was one poster that stood out, and someone with had put on the lettering, worldwide campaign against globalization. [laughter] and you understand, you understand what people meant. in france they had an anti-globalization campaign which was very simple, and it said, no to 2009. that was in 2008. [laughter] a completely any hi list approach. but i want to say what has been happening over the last few years and what is likely to
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happen raises profound questions about the global economy, our global society and our o role as citizens for the future. and in any great city, and this is the greatest city of america, new york, these are profound questions we've got to think about. the good news and bad news about globalization is this: the difficult news for america and for europe to accept is that for the first time in 200 years of industrial history, for the first time, for the first time even going through wars and depressions and wars again we have now reached a position where for the first time europe and america together are being outproduced by the rest of the world, particularly asia, outmanufactured, outexported, outinvested by these countries. and it was hardly surprising that at some point europe and america, 10% of the world's population, would stop being the continents that would produce more than 50% of the world's goods and 50% of the world's manufacturers and 50% of the
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world's exports. and if you thought of that as a single factor, this massive change, this restructuring of the world's economy that's taking place, you would probably be worried about the security of your job and the security of your children and the security of your savings and your investments for the future because we're seeing a massive shift in the industrial productive potential of different parts of the world. but there's a second change that's working its way through, and it's really going to be seen over the next few years as, perhaps, the most powerful driver of world economic growth. because the billion people who are producers in asia, in china and india, but also in the emerging market countries of russia, brazil and south africa, so on, they're not content with being produce beers, they want to be consumers as well. so the biggest driving force of the next ten years will be the rise of the middle classes in all the different countries and continents that we call emerging markets at the moment. and this is the huge opportunity for the world economy to grow
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again. this is the exit strategy from the current set of financial crises that we've got. this is the opportunity for american ingenuity and dynamism and innovation to show that it can produce goods, high-technology goods, custom-built goods, sophisticated goods, knowledge-based goods that are not only going to sweep the markets of america and europe, but also those huge markets of the future. so the world economy can balance, the world economy can create jobs, the world economy can create growth in the future, can send a financial crisis that had been very deep indeed and this massive structural change that is happening between europe, america, asia and the rest of the world. but to do that you cannot pursue orthodox policies because you're at a point of transition in the world economy. you cannot afford not to invest in education and trade and training and skills and technology and science. if you do so, you will not have
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the goods and the services that will be the most sophisticated and the ones that people want to buy. an america with its great inventive genius and with its great ability to create companies that can sell to the world can be one of the great beneficiaries of this new era because you're creating a consumer market in asia that's twice the size of the consumer market in america. and the second thing that's going to happen is if we trade freely with other countries and don't become protectionists, then we can get the big shares of these markets. people are saying we've got a problem here because we've got imports coming from other countries. think of it the other way around. we've got an opportunity here because we've got a huge export market. and the third thing that's got to happen in the future if we're going to make the most of these new opportunities unheard of since the industrial revolution is there's got to be global cooperation. if countries don't work together, then we will find that the world will grow more slowly and more people will be
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unemployed and have lower standards of living than is possible than if we worked together. and i think the biggest test of the next two years is whether america and europe and africa and asia can work together in cooperation to build economic policies that mean that you have sustained growth and because of environmental improvements, sustainable growth, and you can create jobs. and i've estimated you could create 50 million extra jobs, and this would help america escape this period of unemployment if we had coordinated policies across the world. so the message i have from my experience and learning from what we had to do to counteract the financial crisis in 2008 and 2009 is that there are global problems, and they need global solutions. you can't have financial stability in america if there's financial instability in every other country. you can't have good environmental policies in america that work if they're going to be undermined by bad
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environmental policies elsewhere. and you can't have growth without trade, and that means that you have to cooperate with other countries to do so. this week is the week of the nobel peace prize being awarded, controversially as you know, to a chinese citizen. but some of you may have heard the story of alfred nobel who was the founder of the nobel prize. he woke up one morning while on holiday in france. he was a swede. and he saw a newspaper that had, wrongly, an obituary of him even though he was perfectly alive. and he got a terrible shock because the obituary said of alfred nobel -- and it was a mistake because it was his brother who had actually lost his life -- the obituary said this was one of the most notorious and infamous men who was responsible for more death than almost any other because he
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was a manufacturer of armaments because he had allowed armies to fight each other with his weapons. nobel was so impressed by this criticism of him that he decided to change his life and, hence, the nobel peace prize, hence, the nobel prizes for physics and science and mathematics, hence, his intention to do something good that he thought would with undo some of the damage he'd done the in the earlier years of his life. and it does strike me that the world can change. like nobel changed, the world can change, and we can actually do things better in the future. one of the great things i've been asked to do in the last few weeks, it's 50 years this year since john f. kennedy won the presidency of the united states of america. it is 50 years in january since he gave that famous inauguration address that many of you will have read and absorbed and been inspired by as i was and as many
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other people were. and in that inauguration address there are many, many great phrases and sentiments and invocations to do good. ask not what your country can do for you, ask what you can do for your country. never negotiate from fear, never fear to negotiate. the torch has passed to a new generation. in fact, richard nixon was asked -- because he was his opponent in the presidential election -- which of these lines he would have would have loved to have given himself, and he replied, yeah, the line i i would have preferred was i hereby accept the office of president of the united states of america. [laughter] but i was asked by people who are compiling for the kennedy library if i would read some of the words from this inaugural address. and they've asked people from every continent of the world, from india, china, latin america, europe, to read a section of that great inaugural address, and they've compiled
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this as a list of international speakers reading out this address in a new way for a new age. and the part that i was asked to read was twieded we will certain -- divided we will certainly fail. united, however, we can work together to abolish the great evils of our time; hunger, ill literacy, poverty, conflict and war. and i think these are the sentiments that should influence us as we move forward. we've just seen a great global crisis. it has ruined the lives of large numbers of people avoidably. we can build a better global economy in the future, and i'm suggesting one of the ways that we can go about this. but we can underpin that global economy by an ethical view of how different continents can work together and share ideas and benefit from each other's faith traditions. there is nowhere better to start learning the lessons about the past be so that we can influence the future than this great university which to the credit of your president is now leading
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the first global network university of our time, the first in our history and one that is certainly going to change the world for good. thank you for the opportunity to address you. [applause] >> it was a great crisis, and gordon brown has written a great book about it called "beyond the crash," in which he touches on in depth many of the themes he just sounded. i'm going to, in the interest of letting people of the audience be part of this, i'm going to ask one question, and then e we're going to open it up to all of you. one of the most gripping scenes in the book is -- and you powerfully i convey it -- is what you did on your flight back from america on december 26, 2008, as the world teetered on the brink of financial collapse.
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onboard that plane, typically, you weren't sleeping, wielding the black felt pen that you use. you wrote a phrase on a piece of yellow legal paper and then on a second piece of yellow legal paper wrote another phrase and those two phrases play add decisive role in rescuing the world. do you mind telling the story and telling how you got the americans to come around? >> you know, it was fascinating what was happening at that time, but it was also frightening. if you think back to that period when lehman brothers had collapsed and the markets had frozen and nobody quite knew which was the next institution that was going to fall and nobody quite knew how we were going to get out of this, and people were sort of grappling around for solutions because they didn't quite yet understand how serious the crisis was. and we had tried just about everything. and so had the americans.
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we tried to provide liquidity or short-term finance to the banks on the ground that this was simply a cash flow problem, if you like, rather than a structural problem. we tried to give the banks money. then we tried to persuade the banks that they should get extra capital through rights issues, so they'd been issuing shares and trying to get people to buy them. [inaudible] and all the time we were getting nearer the point at which banks would not be able to handle the cash to their customers because they just did not have the money coming in the way that was necessary, despite the fact that the fed and the bank of england and the european central bank were providing resources to them for a short period of time. and i sensed that the problem was not short-term finance. and i sensed that the problem couldn't be solved in an ordinary way. and i had had people working over the last few weeks before
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then about what was the real position of the banks, what was the true position. because there were all these diseased assets. they'd bet on property that was going down in value so quickly. and i realized that we had a situation where we had the opposite of what we really thought the system was about. we had capitalism without capital. the banks did not have enough capital. and one banker said to me, you know, i'm only beginning to understand the risks i've been taking. and i thought, that's a bit late. [laughter] and another one said to me, all i need is overnight finance, and the next day his bank was collapsing. and he needed billions of pounds of capital to underpin his institution. so i talked to george bush in the white house, and i talked to a lot of bankers on wall street, and i talked to all the other presidents and prime ministers who were here in new york for the united nations meeting. and we couldn't tibet a
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consensus -- get a consensus because nobody quite knew how bad the problem was. i realized we had two banks, actually three banks, that would have collapsed within a few days if we hadn't acted. so as i was coming back i realized we have got to, we, the government, have got to recapitalize these banks. we have got to buy shares in these banks. we have, in effect, got to seminationallize these banks otherwise they won't be able to keep going. if we didn't put capital in, nobody else would. they'd be unable to pay out money to people who were calling on the banks to do the service for them. so as i was coming back on the plane, i was working with people like one of the great advisers we had -- not sleeping which i would rather have done on the flight back from the united states. and we said, recapitalize now. so i wrote that on this pad. we've got to restructure the banks immediately, and we were going to put up about 50 billion
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pounds which is, what, about 60, 90, $80 billion. and we decided we'd have to do that. and then i said how could we persuade the banks that they would dilute their share holdings even when they were in such a great position? but they were not admitting the gravity of the position. so we'd have to say to them, under no circumstances would they get any more support from the government in funding or liquidity unless they agreed to our proposal, so we would have to be, give them an ultimatum. either you agree to our proposals, or we will stop funding you. so it wasn't as good as no taxation without representation, but it was no liquidity without recapitalization. not very elegant, but that's what we had to do. so in the next few days we tried to persuade the rest of europe and the americans that this was the way forward. america was doing t.a.r.p. at that time -- >> buying up all the troubled assets. >> yeah. buying up the diseased assets.
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and we thought that wasn't going to solve the problem. but gradually, people started to realize this was the only way forward. we made an announcement, nobody else was going to follow immediately. but by the weekend the europeans had invited me to their meeting so that they agreed to do it, and by tuesday the americans had agreed they would recapitalize their banks as well. so we managed to avert what would have been, i think, a situation in a few days from then where you couldn't have probably got your money from a cash point, and certainly businesses wouldn't have been able to pay they employees because the banks would have been unable to meet the commitments that they had. it was a real crisis, and i think it's only by understanding the depth and severity of the crisis that you can also understand the difficulties that president obama and others have had in trying to get out of that crisis. it was so severe and so fundamental if markets froze up completely, then you've got a long way back from a situation that was so desperate and so severe. so we restructured the spanks,
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and then -- banks, and then we decided we would approach all the other countries to do that. and then we decided you've got to refloat the world economy. so how you've got to have -- you've got to have resources in the world economy so it can start to grow again, and then we moved towards what was the april 2009 meeting where we had the g20 set up for the fist first time, and they agreed to underpin the economy. never done before, never tried before, but i think the combined decisions of all these countries -- america, europe and china and india being part of this as well -- meant we avoided what could have been a great depression. we certainly have had a great and terrible recession, but it didn't descend into the great depression that we've with had in the 930s. 1930s. now, we've got a lot of lessons to learn from that, and i try in the book to say we've got to build a global financial system that works, but we've also got to get back to growth quickly
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because you can't talk about an economic policy that's working if you have got 10% of your population unemployed. it's not something a civilization wants to tolerate. >> we've got microphones in the aisle if people could just line up there. there's one up there. yes, sir. >> [inaudible] the quality of the american financial reform, the quality of financial reforms in the u.k. and other places. do you think what we did in this country after the recession was adequate to prevent another dip and the second question is less about economic policy than it i about another part of globalxx civil society, and that'sxx information.x i wonder if you could sayxx something about diplomacy and security leaks, and security after wikileaks and the julian assange situation. what kinds of policies do we
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need to develop to deal with situations like this? >> yeah, it's quite difficult to talk about secret diplomacy now, isn't it? [laughter] it's one of these, these terms that people will talk about with a bit more caution in the future. can i say, first of all, on financial reform that what i feel is missing at the moment is that we do things in a coordinated way. i think one of the problems that caused the financial crisis was if you have one financial center like new york or london that could be doing all the right things, it can easily be undermined by another financial center that is in a race to the bottom in standards. and so there's no doubt that a lot of the problems arose in new york and in london, but there's also no doubt that a shadow banking system developed which was being operated from a whole series of regulatory and tax
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havens. and if you have that race to the bottom in standards where people can move their money from a place that has got regulations and rules that make sense to a place that is lax and is really competing for business on the basis of the laxity of its standards, then you've got a problem. so my plea would be if we're setting rules and regulations for the future, that america and europe and the major financial centers of the world that now include hong kong and singapore as well as the european and american centers, that we coordinate our rules and regulations and standards in such a way -- and in a transparent way -- that we don't have this race to the bottom that we saw in the past. because i certainly found with british institutions that you, to follow the money you had to go to almost every part of the world and ended up in tax havens and regulatory havens that really were, if you like, lowering the standard that we've got to expect if we are going to
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have proper financial feasibility for the future. so the question is not whether america and britain are doing the right or wrong things. i think their trying to do the right things. the he is son is if you don't -- lesson is if you don't coordinate it, then some other regime will cause problems in the future. as far as diplomacy is concerned, you know, there's nothing that has come out of these, these tapes that suggests that in most cases america is not pursuing an honest and principled foreign policy. there are certain parts of them that you would question, there are certain parts that nobody will like, certain decisions that look quite strange to some people. but generally speaking, what we see is an america that is trying to play an honorable role in the world and trying to do its best. it's, of course, the implementation of these sentiments that becomes the issue in so many different parts of the world where you're
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working for peace in the middle east, where you're working to get your troops out of afghanistan, but you have a stable afghanistan, where you're working to make sure that pakistan is free of terrorism, where you're working to see less nuclear proliferation. these are the aims of president obama's policy, and i don't think there's much that i've seen in the disclosure of the e-mails and everything else that suggests that that is anything other than the wish of the americans to achieve. but, obviously, there are embarrassments for me and for other people in some of the things that are said, and you've just got to accept that. >> sir. >> hi, mr. prime minister. my name is -- [inaudible] and i come from china. and it's really a great honor for me to have a chance to ask you a question. and as you know, as an emerging market with great potential, chinese economy is growing really fast. so my question is, how will you comment on china's role on
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the -- china's role on the road of recovery, and how will you comment your personal experience with chinese leader in china? thank you. >> i don't think there's any country that did more to stimulate its economy to keep the world economy as a whole moving forward than china. and if you actually look at the figures, the amount of extra construction, the amount of extra investment, the amount of extra stimulus in the economy was greater in china than in almost any other country in the world. and china has had the capacity over these last 30 years to take 400 million people out of poverty, and that is a great achievement that i know from talking to president hu and premier wen that they are rightly proud of. now, we can have our disagreements with china about human rights and about the freedom of the press, but we must also seek agreements with
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china about the future. my argument in the book is that if china, india, asia, america and europe in particular but with africa and latin america as well coordinated our policies, if china was able to raise its consumption of goods and services so you would be able to take more people out of poverty more quickly, be able to grow your middle class in a faster way than previously planned, and if at the same time indonesia and japan and other asian countries were able to do likewise, then you would have such a boost to demand in the world economy that the american and the european economies would be able to move forward as well. because they would be able to export goods to the rest of the world. and i just say that the biggest single change you will see in the next ten years -- and we've already seen massive change through the productivity of the chinese worker and through the
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asian growth we've seen in the last ten years -- but the biggest change you will see in the next ten years is this billion more middle class consumers wanting to buy goods including the branded goods, the technology-driven goods that we produce here in america and in europe. and that will be the biggest boost for the world economy that can, could happen, and that will create thousands of jobs here in america because we are in a position to export, as is britain and europe, to the rest of the world. so china is absolutely vital to the future of the world economy not just because of what it can do for itself, but because what in combination and in concert the rest of the world can do to boost world growth and world jobs. so we need more dialogue. we need more discussion. i believe that the best thing that could happen to push growth forward in the next year or two is china agreed to consume more, america invested more in its education and its technology for the future, europe tackled it
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unemployment and, of course, we got africa and the different continents of the world growing again. now, a global agreement could make that possible, and i don't think we're so far away from getting that idea onto the agenda so that at the next g20 that is part of the major discussion. so you can see how important i think china's role in the future is and is going to be. >> yes, sir. >> good afternoon, mr. prime minister. i'm a senior at the stern school of business, the undergraduate business school at nyu, and i had the terrific prejudice to study for my freshman year at bedford square, i hope you'll be able to drop by -- >> of course. [laughter] we need economists in britain now to give us advice, so could you come back and help us? [laughter] >> i saw you last night on the daily show, and i know you mentioned markets need morals. i couldn't agree more. i'm studying ethics now for part of my senior research, and i'd like to know from you what ethical principles drive you and
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if you'd have any advice for a 21-year-old such as myself who holds a moral compass and hopes to be able to continue to hold it and live by it as i enter the work force? >> well, that's a brilliant question, and i do wish you well. and i'm not joking when i say we need economists at britain at the moment, so think about coming to work in our country as well for a bit of time. [laughter] you know, it's a central question of political economy. what is the morality that has got to underpin a successful marketplace? and, you know, the study of economics is changing quite fast now. because in the '80s we were talking about the efficient markets model. now people are talking about behavioral economics to try to explain why people don't always act rationally and why fairness, why, if you like, fear, why irrational exuberance sometimes
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dominates the behavior that you see in the marketplace. and i think we're going back to the study of political economy. and i think that will be something that any economics student will want to play their part in examine being in future -- examining in future years. and as i understand political economy, it started with adam smith who happened to be a citizen of the town in which i grew up, and i'm now the member of parliament for serving in the house of commons. and adam smith live inside that town and was born there and grew up there, and it has a two-mile esplenade which loops -- [inaudible] and you -- can you hear me? yeah. this two-mile esplenade he would look out every morning, and he would see ships coming in and out of kim -- kirkcaldy, and because he saw this trading taking place, he then thought, well, trade is the engine of growth.
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and then he realized that to trade you had to specialize, and to specialize you had to have a proper division of labor between those who did certain tasks and those who did others. and his whole theory of how the economy worked was built from this idea that looking out on the sea he could see that trade was actually transforming the whole economic landscape of the town in which he was born. but adam smith thought that the theory of moral sentiments, which was the book that he also wrote, was far more important than that book on trade, "the wealth of nations." and he always said this was the most important thing he was trying to contribute to the study of society. and underpinning the economy and underpinning markets that had, in his view, to be values that people held to be important. and, of course, you value enterprise, and you value competition, and you value the entrepreneurship that is absolutely vital to the
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successful economy. but adam smith also said that you've got to value fairness and responsibility, and the values that we think important in our everyday life my people that are friends of yours who don't show integrity who you can't trust and are not responsible and don't do their duty and live off the backs of other people rather than contribute to the common good. and in the same way he said the economy, and we would now save big multi-national companies, if they don't exhibit these values, then there is a danger that we will have -- as we had two or three years ago -- markets that don't self-regulate, but markets that self-destruct. so i would say that the values that he wrote about in the 18th century are still the values that have got to guide our economy. and i think the 20th century was a battle between markets and states. what power should markets have, what power should governments
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have? and you had one side saying that markets rules and the other -- ruled and the other side saying the state ought to be more important. the 21st century i think people will say that markets and states can both become vested interests, they can both take power at the expense of the ordinary citizen and the public service. and to control and temper and to supervise the operation of government and markets, they have got to be visibly underpinned by clear, ethical values. and you've got to test how markets are working and how governments are working according to these values. are they acting responsibly? is there integrity? can they be trusted? are they operating in a fair manner? and i think these are the values you've got to look for in a company and in countries operating as well as the values that you admire in the families and the neighborhoods where you live. and that's the case, i think, for political economy becoming more important in the study of economics in future, and that's
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why i would urge everybody who is thinking of a career in economics and business and finance to read some of the great works of political economy which show that an economy can sustainably prosper only when there is trust, integrity, responsibility and where people accept that in response to then being allowed to do everything that they want to do with their enterprise and in a competitive environment, they have got to exercise responsibility and not be reckless in their risk taking at the expense of others. is these are the values that i think are age-old, but the values that come out of our experience of learning lessons from the crisis. >> thank you. you have my vote. [laughter] >> i wish we could stay for another whole hour because this is terrific, but we have time for maybe two more questions. yes, sir. >> all right, thank you. hello, prime minister. my name is jasper, i am also from china, so i have, also, one question regarding china. what specific, like, suggestions or advice do you have for china
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to boost its consumption which you said is very important and significant job for china to do and to adjust itself in the megatrend of globalization? that's my question, thank you. >> some of you may know that the amount of the national income consumed in america, so consumption as a share of national income in america is something like 70%. the amount of consumption in china as a share of national income is about 35%. so china is producing a great deal, but only a third of what it is producing is being consumed by it own citizens. and that's where china can do more to help itself and to help the world economy. you know, in the 19th century britain and america, which were among the first countries to industrialize -- germany and france -- not one of these countries committed themselves during the period of industrialization to the reduction or abolition of poverty. they may have thought they might be able to do something about it with welfare programs, but they were never explicitly committed to the abolition or to the mass
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reduction of poverty. china is, india is, african countries are, and that's to the great credit of these countries that that is the commitment. so what are they going to do? they've got to create a safety net so that people have health provision. they've got to create a safety net so that if people are unemployed, they have some form of income. they've got o create a safety net so that people who are retired and elderly have some sort of provision for their retirement. and if these things can happen and at the same time people are in a position to use some of the savings to buy homes and in position with higher wages to buy the goods that they want to buy including consumer goods that we take for granted in this country, then china's path to being a middle class country with large numbers of people owning their own homes and at the same time in a position to buy consumer goods would help not just chinese people, but help the rest of the world. because instead of america consuming more and europe
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consuming more, then china would also be consuming a great deal, and the demand and supply in the world would be in balance which is not in at the moment. so i think the chinese government understand this and want to do more to improve the rural safety net, want to do more to help people who are going into the towns to get jobs, want to take more people out of poverty. but if we were to advance that more quickly in the next year or two and if we had an international agreement which china felt comfortable about because that was part of the agreement that different countries would do certain things, this would take the heat out of the currency wars, it would take the heat out of the balance of payments which is the latest issue that was discussed at the g20. it would be china doing what it wanted to do but doing it a bit more quickly than, perhaps, it planned to do, and it would be boosting consumer demand and exports and boosting production right round the world. so china can pray a major -- play a major part in rebalancing the world economy, but also in getting growth in america and
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europe. and i think the pattern of events over the next ten years are clear that china's got to consume more. if we could move that a bit faster, than a lot of the unemployment we're likely to see in the next few years could be avoided. >> unfortunately, we have time for just one more brief question. go ahead. i'm sorry, everyone. >> so it's my understand answers -- answers that are too long. >> no. >> hi. i'm a reporter with "forbes", and i'm wondering if you can comment a little bit on the fallout of the crisis as it's developing in if europe. i'm wondering if you think the mechanisms that are currently in place, both the current fund and the plan for new mechanisms after 2013 are going to be sufficient to contain the crisis as it's develop anything portugal, spain or other countries, and if not, are there other mechanisms that you would rend? is. >> yeah. for those people who are not involved in the these european issues, let me just say that the euro is the single currency. its introduction was very, very controversial. britain was one of the
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countries, and i was partly responsible for that, who decided not to join the euro because we thought it was difficult to manage. and at the same time there's a huge amount of euro skepticism. in other words, people skeptical about whether the euro can work in the long run. in fact, there's a lot of euro skepticism in britain as well, and there was one skeptic being interviewed on bbc which many of you will know about, the news program, and he was being asked why he was so skeptical and so hostile and so anti the euro and why he was against anything european. and the interviewer eventually out of frustration said, well, why are you so against it? is it ignorance or apathy in and the man replied, i don't know and i don't care. [laughter] and the euro, the euro, the euro at the moment is undergoing difficult times because greece has got a financial problem.
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it finds it difficult to get tax revenues in. [laughter] and it's got a big public sector. spain has got a different problem. spain has got banks that really were overlending particularly in the property sector, something that happened in america and particularly, also, in ireland as well which has got a huge problem because it overbuilt property, and it's got huge bank debts as a result of them lending money to property developers who can never pay that money back. and you've got portugal which has got a lot of private debt that is owed to people outside the country of portugal itself. and people are then asking, well, if you've got all these problems with the euro, can the euro itself survive? i think it's got to survive even though i did not want britain to join the euro. i think once you've made a big decision like creating a single currency, you've got to make it work. and there's three thicks that
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can -- things that can be done to make it work. you've got to bring together the fiscal deficits, the bank liabilities i've just talked about, and the inability to grow. and if europe can only solve its fiscal deficits but not grow, you can have massive unemployment. if it cannot solve its bank liabilities, you've got pig, big problems because banks will not be lending to businesses, and you'll have low growth anyway. so they've got to have a meeting of the euro leaders, they have got to look at these three problems, find a way forward in one fell swoop for dealing with these problems. it's important they do this in private. and then they've got to seize the initiative from the markets because cubs are being picked off -- countries are being picked off one by one. you hear about greece, then ireland, portugal today, spain next. and you've got to seize the initiative from the markets. one of the lessons we learned in 2009 when we had the threat of a world depression was that if governments don't act together
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and lead rather than are led by the markets, then you will get into huge, huge problems and a downward cycle, a downward spiral that you can't get out of. so my recommendation is that the euro group get together to deal with these three problems which are all soluble but have got to be dealt with together, otherwise you will have continued crises in the euro area. so my recipe for the future is greater cooperation within the euro area to deal with what are real problems that arise from the failure of the banks as well as some problems associated with the return of economic be growth. -- economic growth. but we've got a point in america as well, 10% unemployment in the euro area, 9.8% unemployment in america. this calls for urgent international action for all of us to work together because we're all faced with similar problems where the resources of our economy, the people themselves are being denied the chance to realize the potential in the workplace. and what is the purpose of of
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economic policy if it does not include getting people into work so that they can be prosperous by their own efforts and not to have to rely on either social security or charity? surely, the important be element of the next stage is getting more people back to work and be giving young people the sense that they will have opportunities in the future. >> three quick announcements. first, in a few minutes the prime minister will be signing books in the greenberg lounge across the hall. could all of you remain in your places until he's left. secondly, i want to thank all of you for coming. this has been a fascinating discussion, the beginning of something very important that gordon brown will lead here at nyu and around the world at nyu. and finally, on your behalf -- and he quoted this person earlier -- let me thank someone who more than almost anyone, maybe more than anyone i've ever met exemplifies president kennedy's insight, that leadership and learning are indispensable to each other.
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the world has benefited from gordon brown's leadership, and the world has a lot to learn from him, and so do we here at this university. thank you very much. [applause] >> this event was hosted by new york university. to find out more visit >> c-span's local content vehicles are traveling the country visiting cities and towns as we explore our nation's history and some of the authors who have touched upon it through their work. this weekend on booktv we take you to downtown indianapolis for a look at the new kurt vonnegut memorial lie prayer. >> kurt vonnegut was, perhaps, the greatest american writer. he was a world war ii veteran. he was a hoosier. he was a satirist. he was a political activist. he was a husband. he was a father. he was a friend.
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he was a friend to his fans. he would write back to his fans. he wrote more than 30 pieces of work including plays, novels, short stories. some of his more familiar books are "slaughterhouse five," which is perhaps his most famous; "breakfast of champions," "cat's cradle," and many other other b. vonnegut often wrote about indiana and indianapolis specifically, and if i may read a quote, many people ask me why should this vonnegut library be here in indianapolis, and i have many different answers, but then i found this great quote. it says, all my jokes are indianapolis, all my attitudes are indianapolis. my adenoids are indianapolis. if i ever sweferred myself from
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indianapolis, i would be out of business. what people like about me is indianapolis. so we took that as a green light to go ahead and establish the vonnegut library near indianapolis. -- here in indianapolis. we have an art gallery, a museum room, a reading room, a gift shop, and i would like to share details about these with you today. this is a vonnegut, kurt vonnegut timeline. if you would allow me, i would like to read the quote at the top of this beautiful painting which was created by the artist chris king and by a vonnegut scholar named rodney allen. and both of these individuals live in louisiana. and the quote reads: all moments past, present and future always have existed, always will exist can look at all the different moments just the way we can look
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at a stretch of the rocky mountains, for example. they can see how permanent all the moments are. it's just an illusion we have here on earth that once a moment's gone, it's gone forever. and something that's unique about our timeline is we actually start on the right side and move to the left ready or than the -- rather than the left side and move to the right. one thing we wanted to mention about this quote, we hope that vonnegut would know that while he may think that, may have thought that once a moment is gone, it's gone forever, we like to think that the moment of kurt vonnegut will live on forever here at the vonnegut library. he went to cornell university. he was studying chemistry. he did not plan to go into architecture like his father, but he did think he would move into a science career and discovered at cornell that he was not very much interested in
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doing that. so he enlisted in the army during world war ii, and i'd like to point out a moment here on the timeline that's very important in the life of kurt vonnegut, and that is 1944. edith vonnegut is dying from an overdose, probably intentional, of alcohol and sleeping pills. vonnegut enters combat in europe. he is captured during the battle of the bulge. soon he is riding in a boxcar with other american p.o.w. to dresden a supposedly safe german city unlikely to be bombed. so dresden was this beautiful, cultural city that was not a military target. as vonnegut rode in on a train, he was able to view this beautiful city, and then he was placed in a slaughterhouse where the rest of the prisoners of war were held. his slaughterhouse was slaughterhouse five.
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over here we have an exhibit that we call the dresden exhibit that it's really his world war ii experience that became so important in his writing and his world view later in his life. i'll start with his, a photo that was taken right he was released -- after he was released as a prisoner of war. along with fellow prisoners. we also have his purple heart that was donated by his son, mark vonnegut, to us. he received the purple heart for frostbite, and kurt vonnegut was embarrassed to have received the purple heart for frostbite when so many of his friends had suffered from other types of physical problems and disease. we have a signed first edition of the book "slaughterhouse five." this is important because
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"slaughterhouse five" is probably the most well known book written by kurt vonnegut of the 30 some pieces of writing that he completed. this was possibly the most famous, excuse me, famous. vonnegut -- >> why? >> why was slaughterhouse five famous? so vonnegut, let me give you a little bit of history about what happened to him in germany and my impressions of why it affected people so much. vonnegut, as i read, he was taken to this slaughterhouse. while he was in dresden, the allies bombed dresden, and so his own countrymen as well as allies bombed this city. it was a horrible bombing. it was literally a firestorm, and tens of thousands of people were killed, and these were noncombatants. these were women and children, you know, and old people. and vonnegut, one of his tasks
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as a prisoner was to go out and remove the bodies, you know, from these burning buildings. and he also was required to bury the bodies of women and children. and that affected his life tremendously. he came back from his world war ii experience being completely against war. he was searching for peaceful resolution to conflict and supported diplomacy and other approaches to, to solving problems. i will also point out a photo that was taken after he came back from the war. he got married to jane cox vonnegut who was from be indianapolis as well. this photo was taken on their honeymoon, and as you can see, he is in uniform. vonnegut and jane had three children; mark, edie and
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nannette, nanny. and then many years later his sister, alice, died just a day or two after her husband had died in a freak train accident. alice had four children, and three of them came to live with the vonnegut family. so they had quite a large household, seven children, and vonnegut at that time was writing books that at that time were less familiar, but he had published several books and articles for magazines as well as working a job as a car salesman for saab. the experience of writing about dresden and what happened to him was tremendously difficult for vonnegut. it took him about 20 years to be able to publish the book, "slaughterhouse five."
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jane, his wife, had, you know, encouraged him to write it. she worked as his editor on the book. she asked questions and got clarity on issues and helped him to retrieve a lot of those memories that he had repressed. because of the family situation with the addition of more children and the success that was coming with the publishing of "slaughterhouse five," his marriage with jane was rocky. just, his daughter edie had mentioned about a month ago that that, that experience and the publishing of the book and all that fame brought to vonnegut contributed to their marriage dissolving. and at that time vonnegut had met the photographer, jill
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cremens, and eventually married jill cremens. and she was, you know, his second wife and was the only other person he was married to during his lifetime. i'll move you over here to the, what we call the political activity exhibit. and vonnegut continued to talk about his interests in finding peaceful solutions to conflict. i think that's another thing that made him very popular during the vietnam years and after. this photo, which was given to us by the new york times, was taken during the first gulf war. and there's vonnegut out there at columbia university, you know, i'm sure it was a large crowd because even to his dying day vonnegut would attract a large crowd.
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it was, i have been told he was like a rock star coming into his different speeches in large auditoriums, always filling the auditoriums. so here we are in the art gallery portion of our library. i'd like to take you over here and show you a vonnegut quote that's signed that was given to us by his artistic collaborator, joe pietro. it says: i don't know what it is about hoosiers, but wherever you go, there is always a hoosier doing something very important there. this quote was in the book "cat's cradle," and it's a very funny exchange that the main character has with a fellow traveler on a plane. and that fellow traveler gives this quote. next we have possibly his most famous piece of artwork, the
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sphinter. in his humor, he associated the asterisk with this anatomical feature. and we, we actually have used this asterisk in other pieces of our exhibit including our timeline which you may have thought had stars in the sky. but they're actually vonnegut's asterisks in the sky. we also have life is no way to treat an animal. this is the tombstone for his famous character, kilgore trout, who appeared in many, many of his books. and it is understood that kilgore trout is based on vonnegut himself. and interestingly, the character, kilgore trout, di


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